June 7, 2023

An inventory shift might be starting in the Sioux Falls housing market.

New listings in May increased 23 percent on a year-over-year basis in the city, according to the Realtor Association of the Sioux Empire Inc.

Closed sales dropped 17 percent.

The city’s inventory grew to a 3.4-month supply, up 21 percent from the same time last year.

Existing-home sales slid for the second consecutive month nationwide in May, falling 3.4 percent as of last measure, according to the National Association of Realtors. Higher interest rates continue to impact buyer affordability, the organization said.

“With sales cooling, buyers in some parts of the country have found relief in the form of declining sales prices, which are down 1.7 percent year over year nationally, although more affordable markets continue to see price gains,” according to the monthly report.

The median price of a home sold in Sioux Falls in May was flat with last year at $326,000. The average price is up 7.7 percent at more than $378,000.

The average home spent 71 days on the market before selling, which is five more days than last year.

“While fluctuating interest rates have pushed some buyers to the sidelines, a shortage of inventory is also to blame for lower-than-average home sales this time of year as current homeowners, many of whom locked in mortgage rates several percentage points below today’s current rates, are delaying the decision to sell until market conditions improve,” the report said.

“New residential construction continues to pick up steam as limited existing-home inventory drives buyer demand toward the new-construction market.”

The price range with the largest gain in sales in Sioux Falls was $900,000 to $1 million, increasing 81 percent.

The price range that tended to sell the quickest was $200,000 to $250,000 at 60 days; the price range that tended to sell the slowest was $1 million and above at 116 days.